(Some of) The Challenges of a Nordic Sports Organisation

This post might not sit well with some people and I apologise in advance if you feel that this doesn't accurately reflect what the main challenges facing sport clubs this day are. Like many things in the world of sport, this post is highly subjective but at the same time, is based on the many discussions I've had with people within sport clubs and organisations, regardless of the field of sports.

As most of you know, the modern sports organisation (club) is run like a business. Most sports teams' first team are nowadays limited companies for a wide range of reasons - the most obvious one being to guard the club as a whole if struck by a crisis, i.e. if the first team is managed in a way that the team goes bankrupt, the club's youth teams can continue operating as they don't take the hit. However, what I find highly compelling is that if you compare a "normal" business to a sports team, there are huge differences as to what the public (and I guess management) feel when it comes to a result from a business perspective.

Think about this for a second. At the end of 2018, the Finnish newspaper Ilta Sanomat wrote an article in which they brought up KHL hockey team Jokerit's EUR 56 million loss over the past four financial statements. In the very same article, the managing director was cited with saying: "I feel like I've done a very good job". Yes, I'm guessing the team's fans weren't quite happy to hear about it but was there any actual public outcry that resulted in any significant changes? The answer is no, nothing was at least communicated to the public. Now think about the public's perception if Jokerit instead would've been a Helsinki-based hotel chain. Probably a little bit different tone from the shareholders (and yes, I know that Jokerit is a special case in many ways, and with the new ownership structure might not operate the same way going forward - but still...).

What makes sport teams and organisations so fascinating is the difference from the normal business world. The similarities in organisational structure etc. are completely turned upside down due to the competitive nature of what sport actually is, namely a competition. A team can turn a profit but finish well below their expectations in the league table and consequently call it a "bad season". On the other hand, a team can win a championship and economically turn in a loss of a million and call it a "great season". Fascinating stuff when you think about it really.

From my meetings and discussions with people in various sports organisations, three challenges that clubs face have become somewhat of an occurrence in our discussions:

The lack of planning

The lack of understanding

The lack of resources

In many ways, this is understandable. Most clubs operate with very tight budgets and limited staff and when this is the case, people within these organisations tend to get tasked with a million things to do with seemingly no time to do it either. Not the best combination to actually improve much, right?

However, what I find interesting is that the above-mentioned areas are all heavily related to each other. I've found that many clubs (not all) operate strategy-wise on a year to year basis and in some cases even on a month to month basis. What I mean by this is that at the end of the season, senior management makes up the strategy for the next season. The strategy is often quite limited and is usually based on what was done the year before, with a few tweaks based on some lessons learned. That being said, what many fail to do is to actually plan ahead on a larger scale, say 5 years. This is especially true for clubs in the lower divisions and/or fields of sport that don't have as big of a following as e.g. hockey in Finland or say, football in Sweden. Luckily, planning and understanding are things that can be both learned and fixed, it really only boils down to eagerness to improve and the will to develop one's organisation.

The lack of resources (both economic and number of staff) is however a real struggle that many clubs must face. It's no secret that limited resources usually means that a team can't compete for the best players on the market, significantly decreases its room to develop its organisation and might also hinder its potential marketing.

With the power of social media and the possibilities that the different channels enable, I honestly don't feel that the excuse can be made that the lack of resources should be a reason for not at least making an effort to maximise the benefits of social media from a marketing perspective. With the use of thorough marketing strategies and actually having an idea about what the clubs'/organisations' fans want from their channels, clubs and organisations have the possibility to engage their fans in cost-efficient ways which were not even possible in the past.

When talking about resources and the revenues of a sport team, sponsors are also one thing that immediately comes to mind. This has traditionally been one of the areas in which Nordic, and especially Finnish teams, have had some difficulties in. What I mean by difficulties is that many teams struggle with communicating the benefits of "investing" in their brand on a yearly basis. One could argue that this also is direct consequence of not successfully planning ahead. I realise that things aren't this black and white, but it's no secret that many clubs in the lower divisions don't actually think about the added value that they can bring to a potential sponsor and this heavily hinders them from actually improving and developing their own organisation which again puts them in a difficult situation when looking for new sources of revenue.

Lastly, one brief example. As most of you know, Finland won the World Championship in hockey last week. This, after pulling off one of the most remarkable upsets ever. A huge day for Finland which will forever be remembered in Finland as the most unlikely outcome of a tournament in which the team took home gold after being basically ruled out of the tournament before it even began, our own Miracle on Ice, if you will.

I took a look at Team Finland's official @Leijonat Twitterfeed during the tournament and quite frankly, the content produced during the games were simply put highly underwhelming. One post before the game and one after the game and basically no fan engagement whatsoever - one would assume that sponsors and fans alike would've been happy with more content - especially mid-game and during off-days... One could argue that from a sponsor’s perspective, this felt like a missed opportunity.